Can your business cope with the holiday accrued this year?

Travel restrictions and COVID 19 have played havoc with employees’ carefully laid holiday plans this year. Furlough and redundancies have thrown businesses into disarray in terms of managing their staffing levels and employee holiday requests.

Many employers are dealing with employees who haven’t booked any holiday this year. This might be in response to government advice or their own increased anxiety levels: Will the plane be safe? Will I have to quarantine on return to the UK? Other employers may have asked employees not to take holiday or to take a shorter holiday so that they could function with reduced staffing levels, either as a result of redundancies or employees being furloughed.

As we only have 3 months until the end of the calendar year, if your business’ holiday year coincides with the calendar year, it would be wise to take stock now. What holiday have employees accrued but not taken?

Once you have calculated what holiday employees have owed, you need to be pragmatic — are you going to be able to run your business efficiently if it is all booked before the end of the year?

How to manage employee holiday – your options

First, check your contract of employment and holiday policy. Make sure you comply with them as well as legislation. Then think what would be best for your business.

Your options are likely to include:

  • Directing when holiday is taken

Ask your employees to take accrued holiday at a time that suits the business. Under the Working Time Regulations (WTR), you must give employees twice as much advance notice as the leave you want them to take. So 2 weeks’ notice if you want them to take one week.

  • Carry holiday forward

The rules have changed because of COVID. Holiday can now be carried forward. If it was not possible for employees to take the core 4 weeks of annual leave this year due to the pandemic, they can carry it forward for up to two years. You should consider how you have you structured requesting leave though: Do employees have to use their core leave first? If so, it may not be available to carry forward.

  • Cancelling holiday

As a last resort, you can ask employees to cancel the holiday they’ve booked – the same amount of notice is required as the leave booked. So if one week’s notice is booked, 1 week’s notice needs to be given in advance.

Most employers will be reluctant to do this as it is likely to cause bad feelings, considerable inconvenience, and the employee might lose money for the late cancellation of the holiday they have booked which they may seek payment for from you.

Annual leave – 5 things to remember

  1. Remember that employees on furlough can still take annual leave while furloughed. It is likely to be at a higher rate of pay though.
  2. Any holiday above the core 4 weeks (i.e .the 1.6 weeks of leave specific to the UK and other additional contractual holiday) is subject to the terms of the contract on carry forward. The new WTR rules on carry forward for 2 years do not apply to that additional leave.
  3. Employees who have COVID 19 symptoms when they were due on annual leave may be able to reschedule their annual leave.
  4. You can’t pay in lieu of untaken holiday unless the employee’s employment is terminated.
  5. In coming to a decision on what you might want to do, do bear in mind the potential employee relations issues. Holiday is a precious commodity for employees. Directing employees when to take holiday or to cancel it may have significant repercussions on employees’ loyalty and levels of commitment. Be mindful of health and safety obligations too. Sufficiently rested employees are what businesses need to thrive.  Can you find a happy compromise?

Communication is key here. The presentation of the predicament for the business and discussing options rather than imposing the way forward may lead to a more favourable outcome all round.

Further reading and useful links:

Government Guidance: Holiday entitlement and pay during Coronavirus

ACAS – Coronavirus: Using holiday

The Working Time (Coronavirus) (Amendment) Regulations 2020

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